Potential Fraud Research Articles

Potential of Hospital Fraud in the Indonesia National Health Insurance Era (A Descriptive Phenomenological Research)

Results of the Public Research Anti Corruption Clearing House The Corruption Eradication Commission submitted on December 2, 2016 that until mid-2015 there was a potential of 175,774 hospital claims of fraud that had been detected with a value of Rp. 440 M. In 2016 found an indication of 1 million fictitious claims from the hospital with a value of Rp. 2 trillion. The potential for fraud in hospitals in the era of National Health Insurance (NHI) in Indonesia will have an impact on health financing inefficiencies and at the same time a threat to the sustainability of the NHI program which is expected to reach Universal Health Coverage in 2019. This phenomenological study aims to explore understanding and meaning of the concept of fraud for parties who has had the potential to commit fraud at the hospital. The research method used qualitative research with a Descriptive Phenomenology Research approach. The informants were officers who served patients in administrative and medical matters and the hospital management was selected by purposive sampling. The focus of the study was the experience felt by informants in running the NHI program and how knowledge and attitudes of informants towards the phenomenon of fraud in hospitals. The results achieved in this phenomenological research were in the form of a reflection of the implementation of NHI in hospitals, especially relating to the phenomenon of potential fraud reflected in the knowledge and attitudes of the hospital about fraud and a description of the occurrence of fraud in the hospital. This is the basis for researchers to formulate indicators of potential fraud that still needs to be tested in a larger population.

Implementation of Fraud Risk Assessment To Mitigate The Fraud Risk in Tax Audit Process

<p><em>The emergence of a variety of fraud schemes, ineffective internal controls, and the number of fraud cases that occur in the taxation sector, encourage researches related to fraud risk assessment, especially in tax audit activi</em><em>ties</em><em>. This study aimed to identify potential fraud schemes risks, evaluate risk controls and discuss anti-fraud strategies using a case study at the Directorate General of Taxes in Indonesia. With a sequential mix method approach through a combination of quantitative and qualitative research, and by using rational choice theory, this research extends the literature of previous studies by providing evidence that fraud can be prevented by increasing the probability to detect fraud scheme. This study fills out the gaps related to fraud risk assessment research in </em><em>the </em><em>tax audit </em><em>process</em><em> which have been rarely performed in the literatures.</em></p><em>The results concluded that of the 20 fraud scenarios identified, there were 7 fraud scenarios categorized as high level of residual fraud risk, 9 fraud scenarios at the medium level, and the rest at low levels. This study discussed appropriate controls to mitigate the residual fraud risk to be maintained at the level of organizational risk appetite. In addition, this study also discussed anti fraud strategies that are relevant to the organization, through evaluating anti-fraud strategies that have been previously implemented and anti-fraud strategies that have never been implemented</em>

Implementing Benford’s law in continuous monitoring applications

Research Question: Do modern ERP systems record sufficient information to allow retrospective monitoring of accounts payable transactions? Can Benford’s Law be applied to these transactions to detect potential fraud in accounting data? Motivation: Modern ERP systems are capable of recording several thousands of transactions daily. This makes it difficult to find a few instances of anomalous activities among legitimate transactions. As organizations continue to become more complex and demand more integrated business processes, automated analytics may provide auditors and fraud examiners some degree of assurance on continuous information simultaneously with, or shortly after disclosure of information. Idea: In this study we develop a proof of concept prototype to monitor invoice transactions and identify those that violate Benford’s law. The prototype exploits audit trails in enterprise systems. Data: Data was obtained from the SAP ERP systems of two large organizations. Organization 1, a government department, provided a one month sample of accounting transaction data. Organization 2, a global manufacturing company, provided a six month sample of their transaction data. Tools: Verification and validation was achieved by obtaining independent reviews from an expert and a panel of auditing practitioners. Their feedback was sought using a survey instrument where they rated various aspects of the prototype software. Findings: A key aim was to demonstrate the feasibility of implementing Benford’s analysis in continuous monitoring applications by exploiting audit trails in ERP systems. The concept was demonstrated by designing prototype software. We found that Benford’s analysis, is a useful tool for identifying suspicious transactions. These transactions may contain possible errors, potential fraud or other irregularities. Contribution: An important contribution of the study is that the entire population of transactions for a specified time period are analyzed. This approach is in contrast with the traditional or manual audit approach which is limited because it reviews only a small percentage of a large population of transactions. The prototype demonstrates the application of technology and data analytics to process transaction data from a SAP ERP system in a near real-time basis. This represents the next step in the evolution of the financial audit from manual to automated methods.

Characterisation of complex perfume and essential oil blends using multivariate curve resolution-alternating least squares algorithms on average mass spectrum from GC-MS

Quality control of essential oil blends and the discovery of potential adulterations and product fraud is a significant challenge within the natural oil and perfume industry. In this research, total chromatogram average mass spectra (TCAMS), created from the GC-MS three-way raw data, were employed for the characterisation of complex samples of perfumes and essential oil blends. A multivariate approach for curve resolution was used to resolve the TCAMS of pure essential oils within such perfume and essential oil blends. Resolved TCAMS, in combination with unsupervised pattern recognition approaches revealed the distillation grade and origin of used ylang-ylang oils in perfume mixtures. TCAMS resolved from the essential oil blends were used with a supervised machine learning classification model to identify oils, used in creating the blends. Quantification was performed using a multivariate curve resolution approach, resulting in relative errors of prediction lower than 17.84% with root mean square errors of prediction smaller than 3.43.

PENGARUH PENYAJIAN LAPORAN KEUANGAN DESA, LINGKUNGAN PENGENDALIAN DAN MORALITAS PERANGKAT TERHADAP POTENSI FRAUD DALAM PENGELOLAAN ALOKASI DANA DESA (Studi Kasus di Desa Sungai Golang Kecamatan Kelayang Kabupaten Indragiri Hulu)

This study aims to analyze the direction of the village financial statements, the control environment and the morality of the device against the potential of fraud in the management of village fund allocation. The sampling technique uses census techniques. The sample of this study is 62 village devices in Sungai Golang village. Data collection using a questionnaire. Analysis of the data used is multiple linear regression analysis. The results showed that the of village financial statements had a negative effect on the potential for fraud in the management of village fund allocations, the control environment negatively affected the potential for fraud in the management of village fund allocations and the morality of negatively affected devices with potential fraud in managing village fund allocation.

PENGARUH PENYAJIAN LAPORAN KEUANGAN DESA, LINGKUNGAN PENGENDALIAN DAN MORALITAS PERANGKAT TERHADAP POTENSI FRAUD DALAM PENGELOLAAN ALOKASI DANA DESA (Studi Kasus di Desa Sungai Golang Kecamatan Kelayang Kabupaten Indragiri Hulu)

This study aims to analyze the direction of the village financial statements, the control environment and the morality of the device against the potential of fraud in the management of village fund allocation. The sampling technique uses census techniques. The sample of this study is 62 village devices in Sungai Golang village. Data collection using a questionnaire. Analysis of the data used is multiple linear regression analysis. The results showed that the of village financial statements had a negative effect on the potential for fraud in the management of village fund allocations, the control environment negatively affected the potential for fraud in the management of village fund allocations and the morality of negatively affected devices with potential fraud in managing village fund allocation.

Behavioral red flags of fraud: a gender-based ex post analysis

PurposeThis study aims to attempt a gender-based ex post examination of behavioral red flags of fraud exhibited by fraud perpetrators.Design/methodology/approachQualitative data collected from semi-structured interviews were triangulated, quantified and subjected to statistical analysis to calculate the relative risk of exhibition of a behavioral red flag of fraud by a male/female fraud perpetrator.FindingsThis study reports the percentage of fraud cases in which male and female fraud perpetrators display particular behavioral red flags. The study also enlists the behavioral red flags likely to be more frequently exhibited by female fraud perpetrators relative to male fraud perpetrators and vice-versa.Practical implicationsUse of the results of this study in anti-fraud training is likely to make organizational fraud more susceptible to observation.Originality/valueThis study is unique because it is one of the very few studies that examine employee behavior as a potential fraud signal, establish gender distinction in behavioral red flags of fraud, and assess this phenomenon in a country other than a Western country.

Retraction of: Use of Decellularized Scaffolds Combined with Hyaluronic Acid and Basic Fibroblast Growth Factor for Skin Tissue Engineering by Wu A, Fan L, Xu B, Lin Y, Zhang P, and Wei X. Tissue Eng 2015;21(1-2):390-402. DOI: 10.1089/ten.tea.2013.0260.

Tissue Engineering Part AVol. 27, No. 9-10 RetractionsOpen AccessRetraction of: Use of Decellularized Scaffolds Combined with Hyaluronic Acid and Basic Fibroblast Growth Factor for Skin Tissue Engineering by Wu et al. (DOI: 10.1089/ten.tea.2013.0260)Published Online:13 May 2021https://doi.org/10.1089/ten.tea.2013.0260.retractAboutSectionsPDF/EPUB Permissions & CitationsPermissionsDownload CitationsTrack CitationsAdd to favorites Back To Publication ShareShare onFacebookTwitterLinked InRedditEmail The editors of Tissue Engineering were informed by an external peer reviewer about potential fraud with two similarly published articles in 2014 in Tissue Engineering: Part A, and again in 2015 in the Journal of Materials Science: Materials in Medicine. The two published articles are: 1.Wu Z, Fan L, Xu B, Lin Y, Zhang P, Wei X. Use of decellularized scaffolds combined with hyaluronic acid and basic fibroblast growth factor for skin tissue engineering. Tissue Eng Part A. 2015;21(1–2):390–402. DOI: 10.1089/ten.tea.2013.0260. Epub 2014 Oct 14.2.Wu Z, Tang Y, Fang H, Su Z, Xu B, Lin Y, Zhang P, Wei X. Decellularized scaffolds containing hyaluronic acid and EGF for promoting the recover of skin wounds. J Mater Sci Mater Med. 2015;26(1):5322. DOI: 10.1007/s10856-014-5322-1.Signs of scientific misconduct were found in both articles. In brief, the same images were used in both articles, claiming to show different treatment conditions. Further, the same image was used in different magnifications, again stating that it shows different treatment conditions. Lastly, there appeared to be potential evidence that images were manipulated by cutting, copying, and pasting elements from one image to another.The editors of Tissue Engineering brought this issue to the attention of the authors, but were not satisfied by their response. As a result, the editorial leadership of Tissue Engineering have determined that a retraction is required in order to protect the integrity of the literature.In 2015, Dr. Wei published another paper in Tissue Engineering entitled, “Promoting the Recovery of Injured Liver with Poly (3-Hydroxybutyrate-Co-3-Hydroxyvalerate-Co-3-Hydroxyhexanoate) Scaffolds Loaded with Umbilical Cord-Derived Mesenchymal Stem Cells, published in volume 21, number 3–4, which is also being retracted separately based on the potential evidence of image manipulation.Tissue Engineering, its editors, and its publisher are committed to upholding the strictest standards of the scientific record and the community it serves.FiguresReferencesRelatedDetails Volume 27Issue 9-10May 2021 InformationCopyright 2021, Mary Ann Liebert, Inc., publishersTo cite this article:Retraction of: Use of Decellularized Scaffolds Combined with Hyaluronic Acid and Basic Fibroblast Growth Factor for Skin Tissue Engineering by Wu et al. (DOI: 10.1089/ten.tea.2013.0260).Tissue Engineering Part A.May 2021.645-645.http://doi.org/10.1089/ten.tea.2013.0260.retractcreative commons licensePublished in Volume: 27 Issue 9-10: May 13, 2021Online Ahead of Print:March 19, 2020PDF download

Is it suitable for your local governments? A contingency theory-based analysis on the use of internal control in thwarting white-collar crime

PurposeThe purpose of this study is to extend existing theory by developing a contingency theory for the public sector and to provide a landscape for local government to deal with white-collar crime. In recent years, the theme of risk management and internal controls, which is popular in the industry and private sector, has been mirrored by public sector organisations. Of course, it is to improve fraud risk control systems. We have to accept that public sector organisations have a growing need to control the (fraud) risks in a rapidly changing economic environment. Within this situation an effective internal control is becoming strategically important in many organisations, as it is proving to be a cost-efficient way to manage these risks in everyday operations. Here, the authors conducted a case study on the risk management control system at an Indonesian local government.Design/methodology/approachThis study uses mixed methods, integrating quantitative and qualitative data – in-depth interviews and questionnaires were required to address the social phenomenon being investigated.FindingsThis study found that the structure of the control system fits a generic model, in which control systems are fundamental factors to all departments. It shows that control systems can support managers to align employee capabilities, activities and performance with the organisation’s goals and missions. In addition, the authors could identify, risk assessment and monitoring activities are effective measures of controlling organisation’s activities, and potentially could diagnose potential (fraud) risks, deterring to the achievement of organisational aims. Ideally, those aspects should be performed on a continuous basis if organisations want to prevent the spread of numerous potential menaces. In other words, if an organisation fails to carry out risk assessment correctly, it will result in unidentified possibility of fraud risks. The more explicit the risk assessment, the more effective the detection of fraud.Practical implicationsIt can be alternative to consider Committee of Sponsoring Organizations of the Treadway Commission’s internal control as fraud mitigation in local government.Originality/valueThis study offers new directive discussion about internal controls as notion of fraud mitigation.

Trust and trusting behavior in financial institutions: Evidence from South Korea

This paper considers trust and trusting behavior towards financial institutions in South Korea. The survey data shows that people on average have higher trust towards financial institutions than towards other individual counterparties, although trust towards financial institutions in South Korea can still be improved further. My results imply that financial institutions should put more efforts in earning trust especially from those at the low end of wealth spectrum and those in young age, so that they can fully benefit from institutional services and be protected from potential frauds more likely to happen outside of regulatory boundary. This paper addresses a relative notion of trust and trusting behavior, i.e. trusting financial institutions relative to trusting other individual counterparties.

Applying visual analytics to fraud detection using Benford's law

AbstractBenford's law has been examined as a useful tool for detecting potential accounting fraud. In this article, I provide an introduction to Benford's law and examine how the first digit, second digit, and first‐two digits tests in Benford's law can be employed to detect potential accounting fraud. In addition, I also highlight, through a worked example, how Tableau, a visual analytics tool, can be used to perform Benford's law's first‐digit test to detect potential fraud.

A Simple Test for the Extent of Vote Fraud with Absentee Ballots in the 2020 Presidential Election: Georgia and Pennsylvania Data

This study provides two methods to measure vote fraud in the 2020 presidential election, though they provide varying degrees of evidence for fraud. To try isolating the impact of a county’s vote-counting process and the potential fraud, I first compare voting precincts in a county with alleged fraud to adjacent similar precincts in neighboring counties with no allegations of fraud. In measuring the difference in President Trump’s vote share of the absentee ballots for these adjacent precincts, we account for the difference in his vote share of the in-person voting and the difference in registered voters’ demographics. I compare data for the 2016 and 2020 presidential elections. There is some weak but inconsistent evidence of vote fraud for Georgia and Pennsylvania. In Pennsylvania, the evidence is strongest for the provisional ballots. Voters were allowed to correct defects in absentee ballots using a provisional ballot on Election day – implying an additional 6,700 votes for Biden. Second, vote fraud can increase voter turnout rate. Increased fraud can take many forms: higher rates of filling out absentee ballots for people who hadn’t voted, dead people voting, ineligible people voting, or even payments to legally registered people for their votes. However, the increase might not be as large as the fraud if votes for opposing candidates are either lost, destroyed, or replaced with ballots filled out for the other candidate. The estimates here indicate that there were 70,000 to 79,000 “excess” votes in Georgia and Pennsylvania. Adding Arizona, Michigan, Nevada, and Wisconsin, the total increases to up to 289,000 excess votes.

Early Warning Fraud Determinants in Banking Industries

This study examined the effect of information technology governance, internal control, and organizational culture of early prevention of potential fraud based on the perception of bank employees. The population was all the Indonesia Stock Exchange listed banks. The sampling method used a combination method, namely random sampling for bank selection and convenience sampling of survey respondents. The number of sample banks that responded was 14 banks, and the number of respondents was 72 people. We measured the variables with a Likert scale and used partial least square (PLS) for the data analysis. The results proved that internal control and organizational culture had a significant positive effect on early warning for fraud. Information technology governance had a positive, but not significant impact on early warning for fraud. Therefore, the banking industry, which has highly regulated business activities has implemented adequate internal control and organizational culture as an effective early warning for fraud. Despite the application of IT in the banking industry in Indonesia it has not been massive, so the influence of IT governance on early warning of fraud was not significant.

The rise of telemedicine: how to mitigate potential fraud

The global market for telehealth is expected to grow by $95.72bn between 2020 and 2024. 1 Driven by the rapid growth in remote patient monitoring, virtual GP consultations and online prescription services, we have already begun to see this growth take off. But these figures were estimated before the full Covid-19 pandemic ensued. With 1.5 million people in the UK now socially shielding, and with the rest of the country in lockdown for weeks, it is not surprising that there has been a surge in online medical advice and services. 2 Driven by the rapid growth in remote patient monitoring, virtual GP consultations and online prescription services, the telehealth market has enjoyed a significant boom. However, this has created a lucrative opportunity for fraudsters. Over 1 billion patient health records can be easily accessed on the dark web and millions of additional records are being added daily. Medical records command a high value to bad actors. The future of telemedicine can only be assured if trust can be reliably established between the medical expert and the patient, says Philipp Pointer of Jumio.

Understanding the COSO 2013 Framework: Four Short Cases for Use in AIS and Auditing Courses

ABSTRACT Since our students will be auditors or accountants after they graduate, they need to understand how to apply and assess the components of the COSO 2013 framework in their evaluations of a client's internal controls and the reports used for decision-making. We present four short cases addressing the components of the COSO 2013 Internal Control—Integrated Framework. The short cases we provide focus on the interaction of the components to help students see how these components combine to form a strong internal control system. Learning objectives of the cases are to help students: 1) practice performing a risk assessment and making recommendations to respond to the identified risks, 2) identify non-accounting information that could be used to monitor operations, 3) evaluate the control environment of an organization in terms of the five principles of the COSO 2013 control environment component, and 4) evaluate potential fraud risk, identifying the information and monitoring activities that could be used to mitigate that risk. A pre- and post-test analysis shows that students, especially undergraduates, exhibited significant improvement in their understanding of the components of the COSO 2013 framework. Implementation guidance and other feedback are included.

Multi-Dimensional Fraud Detection Metrics in Business Processes and their Application

Occupational fraud is defined as the deliberate misuse of one’s occupation for personal enrichment. It poses a significant challenge for organizations and governments. Estimates indicate that the funds involved in occupational fraud cases investigated across 125 countries between 2018 and 2019 exceeded US$3.6 billion. Process-based fraud (PBF) is a form of occupational fraud that is perpetrated inside business processes. Business processes underlie the logic of the work that organizations undertake, and they are used to execute an organization’s strategies to achieve organizational goals. Business processes should be examined for potential fraud risks to ensure that businesses achieve their objectives. While it is impossible to prevent fraud entirely, it must be detected. However, PBF detection metrics are not well developed at present. They are scattered, unstandardized, not validated, and, in some cases, absent. This study aimed to develop a comprehensive PBF detection metric by leveraging and operationalizing a taxonomy of fraud detection metrics for business processes as an underlying theory. 41 PBF detection metrics were deduced from the taxonomy using design science research. To evaluate their utility, the application of the metrics was undertaken using illustrative scenarios, and a real example of the implementation of the metrics was provided. The developed metrics form a complete, classified, validated, and standardized list of PBF detection metrics, which include all the necessary PBF detection dimensions. It is expected that the stakeholders involved in PBF detection will use the metrics established in this work in their practice to increase the effectiveness of the PBF detection process.

Identifying Organisational Climate Elements that can be used to Detect and Prevent Management Fraud

Management fraud is a global problem that has become more widespread than ever before. Current modes for detecting and preventing fraud, such as those based on demographic factors, have not been very successful. It is argued that organisational psychology—more specifically the study of organisational climate—provides excellent vantage points from which to understand management fraud. The purpose of this study was to identify organisational climate elements that increase the potential risk of management fraud within an organisation. The study has done this in order to employ these elements in detecting and preventing potential management fraud. A mixed research design was employed, encompassing two broad phases, namely: classification, whereby a framework was developed; and empirical validation, which made use of analytical induction as well as Lawshe’s content validity ratio. It was found that leadership style and managerial values are the elements that relate most to the detection and prevention of management fraud. It was also found that ethical leniency, poor example setting and hypocrisy were likely to create climates in which management fraud takes place. In terms of values, the study found that it is not simply the adoption or communication of values that is important in shaping a fraud-conducive climate, but rather whether or not any professed values are seen to be implemented or lived.

Event Data Recorder (EDR) systems in the context of claims adjustment in motor insurance. A case of Poland

The aim of this paper is to present relevant information on EDR (Event Data Recorder) as well as to analyse how EDR systems may be applied within the process of claims adjustment in the Polish motor insurance. Although, neither Polish nor European legislation directly refers to the said systems, their significance is continuously growing. The discussed systems are currently applied within the majority of the newly sold vehicles in Poland. Brand new versions of those systems allow identifying some key circumstances and factors of traffic accidents such as the exact place of an accident, velocity of the vehicle, a number of the people involved or a number of explosions of car air-bag inflators. However, it should be noted that originally the EDR systems primarily were to improve a level of driving safely while the identification of traffic accidents causes was only an additional and marginal benefit. In other words, a question should be posed whether it is admissible under the relevant law regulations that the data recorded in the system may in advance determine a cause of an accident. Other doubts which may result from the EDR are privacy concerns and data ownership as well as the use of the EDR systems within a process of detecting potential fraud or offences related to claims adjustment. For obvious limitation of time and space, premium calculation fells outside the scope of this paper as this particular issue requires separate and detailed considerations.

When Do Campaign Effects Persist for Years? Evidence from a Natural Experiment

AbstractA unique revote allows for a natural experiment to evaluate whether campaign effects can last for nearly a decade: A right‐wing conservative party missed the 5% threshold in a German state by a mere vote in 2007, but the Constitutional Court ordered a revote in a single precinct over potential election fraud. After a one‐sided campaign focusing on law and order, the party's vote share increased more than sixfold. By comparing the precinct with its direct surroundings, the study shows that the revote campaign had long‐lasting effects on vote choice and broader security‐sensitive behavior. Residents in the revote precinct installed more warning signs on their property to deter burglars. They were not more supportive of right‐wing attitudes but were more likely to believe that election fraud reoccurred. Based on habitual‐voting and social‐norm theories, the study suggests that persuasion could be durable if candidates provide an unchallenged interpretation of political events.

Analisis Potensi Kecurangan Dalam Pengelolaan Keuangan Desa (Studi: Desa Kesongo, Kecamatan Tuntang, Kabupaten Semarang, Jawa Tengah)

Indonesia Corruption Watch (ICW) found 154 corruption cases during 2015-2017, most of them were corruption cases involving the village budget. The potential for fraud can be detected by cheating triangle theory, namely pressure, opportunity and rationalization. The purpose of this study is to identify potential fraud in village financial management. This study uses a qualitative approach and the type of data used is primary data obtained directly using interview techniques from the village financial management process conducted by the Village Financial Management Technical Officer (PTPKD) Kesongo Village, Tuntang District, Semarang Regency. The results of the study show that in the village financial management in Kesongo Village there is potential for fraud including: the necessity to do something; disciplinary behavior; feel that they are not detrimental to others and consider mistakes to be natural and often occur. This study concluded that in Kesongo Village there was potential for fraud in the process of village financial management.
 Keywords: Village Financial Management, Village Apparatus, Potential for Fraud, Control